Prediction: After Underperforming the Nasdaq for 8 of the Last 10 Years, the Dow Will Beat the Nasdaq and S&P 500 in 2026

• The Dow’s price-weighted operation is simply a cardinal quality that heavy affects its performance.

• The Dow has acold much vulnerability to fiscal stocks than the market-cap weighted Nasdaq and S&P 500.

• Balancing a growth-heavy portfolio with dividend-paying Dow stocks is simply a large mode to boost diversification.

• 10 stocks we similar amended than Dow Jones Industrial Average ›

The Dow Jones Industrial Average (DJINDICES: ^DJI) had a large twelvemonth successful 2025, with a full instrumentality of 14.9%. But it inactive fell abbreviated of the Nasdaq Composite's (NASDAQINDEX: ^IXIC) 21.1% full return, marking the eighth twelvemonth retired of the past 10 that the Dow has underperformed the Nasdaq.

Here's wherefore the Dow could spell against the likelihood and outperform the Nasdaq and the S&P 500 (SNPINDEX: ^GSPC) successful 2026, what it could mean for your fiscal portfolio, and 5 Dow dividend stocks to bargain now.

The Nasdaq Composite contains thousands of stocks listed connected the Nasdaq exchange, portion the S&P 500 is comprised of astir 500 starring large-cap companies. The Dow is adjacent much selective, with conscionable 30 holdings.

A large quality betwixt the Dow and different indexes is that it's price-weighted alternatively than market-cap weighted, meaning the astir invaluable companies don't transportation the astir weight. The 5 largest holdings successful some the Nasdaq and the S&P 500 are Nvidia, Alphabet, Apple, Microsoft, and Amazon. The 5 largest Dow holdings by weighting are Goldman Sachs, Caterpillar, Microsoft, American Express, and Home Depot (NYSE: HD).

Massive outperformances by fiscal stocks with precocious nominal banal prices, specified arsenic Goldman Sachs, American Express, Visa, and JPMorgan Chase, person pushed financials to go the largest assemblage successful the Dow. They marque up 28.3% of the index, followed by 20.2% for tech and 14.7% for industrials. The Nasdaq is dominated by tech-focused companies, portion 34.4% of the S&P 500 is successful tech.

The summation of Nvidia and Amazon (in 2024) and Salesforce (in 2020) has made the Dow much growth-stock-focused. But it's worthy noting that Amazon and Salesforce some heavy underperformed the S&P 500 successful 2025. So did Dow components Apple and Microsoft. Although Nvidia crushed the S&P 500 again successful 2025, it lone makes up 2.3% of the Dow compared to 7.2% of the S&P 500 and 13.4% of the Nasdaq-100, which is the 100 largest non-financial companies by marketplace headdress listed connected the Nasdaq banal exchange.

Over the past decade, the biggest twelvemonth of outperformance for the Dow comparative to the Nasdaq and S&P 500 was 2022, erstwhile the Dow mislaid value, but didn't autumn arsenic overmuch arsenic the S&P 500 oregon Nasdaq. 2016 is the lone different twelvemonth the Dow bushed the Nasdaq, though it was adjacent successful 2017, 2018, and 2021.